Employees walk through the lobby of Forest City Realty Trust, Inc.'s new headquarters at Key Tower in downtown Cleveland. The company's shareholders are scheduled to vote Thursday on a sale of the nearly century-old real estate business.
(Vocon)

CLEVELAND, Ohio -- Forest City Realty Trust, Inc., has asked a federal court judge to reject former CEO Albert Ratner's request to push off Thursday's planned vote on the sale of the company.

In a Wednesday morning brief, attorneys for the Cleveland-based real estate investment trust called Ratner's lawsuit, filed late Monday, "eleventh-hour, fire-drill litigation." The lawyers asked U.S. District Court Judge Christopher Boyko to deny Ratner's motion for a temporary restraining order and preliminary injunction.

Forest City's shareholders are scheduled to vote Thursday morning on selling the nearly century-old business to an affiliate of Brookfield Asset Management, based in Toronto. The deal was announced in late July and, if approved, will occur late this year.

Some institutional shareholders already have signaled their support for the sale, but at least two members of Forest City's founding family - Albert and James Ratner - have publicly stated their opposition. And Forest City's board of directors, which was reconfigured in the spring, was spilt seven-to-five on the transaction.

Albert Ratner, the 90-year-old son of one of the company's founders, asked the court to delay the vote on the grounds that Forest City's proxy statement about the Brookfield deal was incomplete and misleading. On Wednesday, the company disputed those claims - and said pushing off the special shareholder meeting will cause significant damage.

"A judicial order enjoining the vote would create substantial uncertainty that could threaten the $6.9 billion transaction, destabilize the company's stock price and impose harm on thousands of third-party public stockholders," the lawyers wrote.

The attorneys also chastised Ratner for waiting so long to take legal action. The company released an early version of its proxy statement in September and an updated version, including the date of the shareholder vote, in mid-October.

Two weeks later, Ratner sent the first in a series of open letters urging his fellow stockholders to reject Brookfield's offer of $25.35 per share. Ratner says the deal shortchanges shareholders, fails to reflect the value of the company's real estate and stems from a flawed process. His mounting frustration drove him to appeal to the court this week.

"Plaintiff can offer no legitimate reason why this action was not filed weeks ago," Forest City's attorneys wrote in their response. "And, in fact, no legitimate reason is plausible. The only possible explanation is the obvious one - to game the system by depriving Forest City of adequate time to respond and depriving the court of adequate time to fully consider the issues. This kind of tactical behavior should not be tolerated, and plaintiff's motion should be denied."

Ratner controls just under 1 percent of Forest City's outstanding shares. Among them, members of the Ratner, Miller and Shafran families and their heirs own roughly 10 percent of the company's stock, Ratner said.

The family gave up much of its grip on the company last year, when Forest City's shareholders voted to scrap a long-running, two-tiered stock structure that favored descendants of the founders. Despite that decision and other major changes to the company's structure and holdings, Forest City's stock price hasn't picked up much.

In recent weeks, it has been hovering a bit below what Brookfield plans to pay.